Cut 132,000 Civil Service posts: calculation note

Central fiscal result

-£4.0bn - Net fiscal impact in 2028-29

Low case: -£8.0bn. High case: -£1.5bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Model 132,000 Civil Service posts removed by 2028-29.
• Central case assumes 80,000 net FTE reduction by target year.
• Baseline is 516,150 FTE in March 2025.
• Excludes wider public-sector workforce reductions.

Affected population

• Affected population is Civil Service FTE posts, not all public employees.
• Direct exposure is concentrated in DWP, HMRC, MoJ, Home Office and MOD.
• Indirect exposure includes claimants, taxpayers, courts, immigration users and businesses.
• Grade mix is unknown, so average-cost assumptions are broad.

Gross impact

• Central saving: 80,000 FTE x £65,000 gross employment cost = £5.2bn.
• Transition costs and outsourcing reduce net saving by about £1.2bn.
• High-saving case assumes near-full pledge and tight contractor control.
• No productivity gain is scored without service redesign detail.

Fiscal build-up, central case

• Gross staff-cost saving: -£5.2bn
• Redundancy and transition costs: +£0.5bn
• Contractor and IT substitution: +£0.5bn
• Lost compliance or service receipts: +£0.2bn

Central net impact: -£4.0bn in 2028-29.

Behaviour and pass-through

• Low case assumes close to the promised headcount cut and limited backfilling.
• Central case assumes slower attrition and some contractor substitution.
• High-cost case assumes only modest savings after redundancy and backfill costs.
• Economic output falls if administrative bottlenecks delay private activity.
• No broad public-sector multiplier saving is added.

Phasing

• 2026-27: -£0.2bn. Preparation or partial implementation.
• 2027-28: -£1.8bn. Main ramp-up year.
• 2028-29: -£4.0bn. Target-year central estimate.
• 2029-30: -£4.4bn. Continuation at steady-state assumptions.

Main source groups

• Cabinet Office, "Civil Service Statistics: 2025" (2025): Civil Service employment was 549,660 headcount and 516,150 FTE at March 2025; sets the scale for a 132,000-post reduction.
• Office for Budget Responsibility, "Economic and fiscal outlook: March 2026" (2026): The OBR forecast sets the macro, borrowing and receipts baseline used for broad fiscal context; prevents treating tax cuts or spending changes as self-financing.
• Smith, "Public Sector Downsizing and Productivity" (OECD Journal of Budgeting, 2012): Public-sector downsizing saves money only when tasks, workforce plans and service targets are redesigned together; relevant to large Civil Service headcount reductions.
• Ramey, "Can Government Purchases Stimulate the Economy?" (Journal of Economic Literature, 2011): Evidence on government spending multipliers is mixed and depends on slack, monetary policy and financing; useful for defence, policing and public-sector cuts.
• Conservative Party, "Our Plan for Britain" (2026): Used to define the pledge wording, policy scope and implementation scenario being modelled.